~ 我看青山多妩媚，料青山见我应如是 The mountain looks so beautiful in my eyes, that it reminds me of myself

SEC Examines Berkshire Disclosures

The Securities and Exchange Commission is examining the disclosures Berkshire Hathaway Inc. made about its $26 billion purchase of Burlington Northern Santa Fe Corp. railroad, said people familiar with the matter.

For a number of weeks, the SEC has been looking at how Berkshire, helmed by billionaire investor Warren Buffett, informed other Burlington shareholders about its offer to buy the company in late October 2009, these people said.

At the time, Berkshire was already a 22.6% holder of Burlington stock. Under a section of securities law generally known as ’13D,’ large holders must promptly alert other stockholders of any ‘plans or proposals’ to control a company. Technically, the disclosure, which must be filed with the SEC, should happen within a few business days after an offer, say some securities lawyers, but the matter has long been open to interpretation.

Mr. Buffett declined to comment. The SEC also declined to comment.

Mr. Buffett amended his securities holdings on Nov. 3, 2009, the day the acquisition was announced. Securities filings show that he first indicated he could pay $100 for each Burlington share to company Chief Executive Matthew K. Rose on the evening of Oct. 23.

The transaction was a highlight of Mr. Buffett’s career and represented his largest-ever deal. Mr. Buffett saw rail transportation as a growing industry over a coming period of higher energy costs. Mr. Buffett declared it an ‘all-in wager on the economic future of the United States.’

The reporting law is intended to help company officers by limiting shareholders’ ability to make a surprise takeover offer. But the adherence to and enforcement of this standard has long fallen in a gray area. Potential buyers are loath to disclose a potential deal, fearing that it could upset their ability to complete the transaction. The SEC, meanwhile, has shown only spotty attention to this area of the law over the years, say securities attorneys.